WASHINGTON - Not long ago, a congressman rode into the First National Bank of Dodge City for a showdown of sorts.
The bankers sat him down and made him stare down the barrel of the legal howitzer he and his colleagues had aimed at the industry.
It was all part of a grass-roots lobbying effort by the industry to get Congress to roll back some regulations, and in Dodge City, at least, the effort seems to have had an impact.
Court of Last Resort
"We're making you guys do all this?" one of the bankers recalls Rep. Patrick Roberts, R-Kan., exclaiming after two hours being briefed on regulations governing consumer disclosures, property appraisals, community lending, and money laundering.
The six-term congressman saw the $120 million-asset bank's files, chock-full of required reports, and the forms borrowers must contend with to get a loan.
"I'm their court of last resort with the bureaucracy," Mr. Roberts said last week while recalling the visit. "They said, |Read this; it doesn't make any sense.' I read it - and it doesn't make any sense."
Bankers generally leave lobbying to their hired guns on Capitol Hill. But the pros have been unable to kill a barrage of banking bills that have ended up costing the industry an estimated $11 billion a year.
So the lobbyists are organizing posses from the industry's citizenry to fight locally against what they perceive as regulatory oppression.
The American Bankers Association and the Independent Bankers Association of America, as well as many of the state banking trade associations, are launching an all-out assault in which local bankers are bombarding their Congressmen with letters, throwing money at politicians who will support the industry's positions, and meeting face to face with the lawmakers to explain their side of the issue.
Rousing the Troops
With just a few weeks left on the current Congressional calendar, "We're really building for next year," said the ABA's top lobbyist, Edward Yingling.
Between now and the November elections, the ABA and the state associations will cajole their members to become more active in local congressional elections, something the industry has never really emphasized before.
"We've always been so passive," said Roger Beverage, executive vice president of the Oklahoma Bankers Association. "Bankers have always sat back and let things happen to them."
The industry groups claim they are not attempting to dilute safety and soundness standards.
To wit, the ever-rising capital requirements are not being targeted. But bankers say the growing burden of forms to complete and reports to file is time-consuming, costly, and contributing to the credit crunch.
Horror stories abound. C. Kendric Fergeson, chairman of National Bank of Commerce, a $60 million-asset bank in Altus, Okla., decried the proliferation of paper that banks must contend with in testimony before the Federal Institutions Financial Examination Council in June.
Ten years ago, a customer had to sign his name twice to get a mortgage, he explained. Today, a borrower has to sign 31 times to get a home loan.
Mr. Fergeson's reaction: "Both sets of forms said the same thing: |I promise to pay' and |You get my house if I don't.' That's
The Bush administration already has allied itself with banks by introducing legislation to reform nearly 30 regulations, including the Community Reinvestment Act and mandatory underwriting standards.
Bankers are excited because finally they have an issue the entire industry can solidly support. Further, they are convinced their arguments will be supported by people beyond the banking industry: Too much regulation is driving up loan costs for borrowers and pushing down interest rates for savers.
Fear Still Prevalent
But keep the cork on the champagne.
No matter how many comments to congressmen bankers can coax, the industry first must persuade lawmakers that the regulations being dumped will not lead to a repeat of the savings and loan industry's collapse. And that will be tough.
Two influential opponents - the General Accounting Office and The Washington Post - already are warning that the Bush administration's regulatory relief bill will set the stage for another financial disaster.
To sway Congress, bankers must stress that regulatory compliance costs are preventing banks from funding economic development, according to Mr. Beverage.
"This is a small-business issue - not just a banking issue," he explained.
The ABA is devising a survey now that is designed to show how much regulatory compliance is knocking off rates paid on deposits and adding to loan costs.
With that point, Don Childears at the Colorado Bankers Association won over Rep. Pat Schroeder, D-Colo.
"She's friendly and supportive in ways she hasn't been before," Mr. Childears said. "I don't believe it's because she suddenly likes banks, but she understand this is killing small business."
But it will take time for the banking industry's argument to overtake the real fear in Congress that easing any bank regulation is a bad idea. No one expects a bill with regulatory relief to pass this year. A lot of legwork will be done between now and next year, when a new Congress convenes.
Bankers are being encouraged to do door-to-door campaigning, help in fund raising, and hold cookouts for candidates.
The Colorado Bankers Association sponsored a debate in June between the leading candidates to replace the retiring Sen. Tim Wirth, a Democrat. While the debate covered the usual range of issues, it focused on banking and in particular on the industry's regulation.
"It generated public attention to this issue," Mr. Childears said. "Both candidates just flatly said it is just atrocious what has happened to banking."
Janet Lamkin, lobbyist for the California Bankers Association, is breaking out bank compliance costs by congressional district so lawmakers will know what their banks are spending on regulation.
For the state's two hot Senate races, the California group is quizzing the four candidates on their position on bank regulation. The answers will help determine who the association endorses.
"The incumbents are very willing to listen because they are worried about the credit crunch," Mr. Lamkin said.
The ABA plans a massive letter-writing campaign for early 1993. Mr. Yingling said they are aiming to generate tens of thousands of letters. Videotapes will be produced to motivate employees, he said.
The IBAA mailed 240,000 postcards to 10,000 community banks this month, urging them get their customers to send tile cards to their congressmen.
More Contacts Urged
While the ABA and IBAA are not coordinating their efforts. they are both asking members to to duplicate Dodge City's example and invite their representatives to the bank to see the regulatory burden.
Rep. Roberts, the congressman from Kansas, endorsed the tool.
"The more meetings that individual bankers can hold with their individual member of Congress, the faster this thing [the reform bill] is going to get passed," Mr. Roberts said in an interview last week.